IJMT Volume 2, Issue 5 ISSN:

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1 A STUDY ON ECONOMIC PROFILE AND FINANCIAL DECISION OF POULTRY FARM OWNER S WITH REFERENCE TO NAMAKKAL DISTRICT, TAMILANADU Dr. R. MOHANRAJ, M.B.A., M.Phil., Ph.D.* Dr. L. MANIVANNAN** Abstract: The Indian poultry industry has been on the continuous growth trajectory in the recent past aided by different contributing factors of national developmental regulations, emerging organized retail industry, government s including export supported by availability of funds for new projects as well as for easy financing for prospective poultry farmers. The industry seems to be breaking out of its conventional cyclical trends and of the different sizes of broilers and eggs. The broilers and eggs segment has exhibited robust growth in production and sales over the last few years. The poultry Industry in India has emerged as the most dynamic and rapidly expanding segment live stock economy as evident from the production level touching about 47 billion eggs and 850 million tons broilers with a compounded annual growth rate of 13% and 15% respectively. Today, India is the 3 rd largest egg producer and 4 th in broiler production in the world. The poultry industry is one of the fastest growing sectors in the country. Poultry industry has taken 50 years to reach its present status in India. There was no technical know how available to start with. The poultry farmer and veterinarian have taken lot of strain to bring the poultry industries to the present status to produce cheap poultry meat and other product as a source of animal protein. * Associate Professor in Management Studies, Annai Mathammal Sheela Engineering College, Erumapatty, Namakkal ** Reader in the Department of Corporate Secretaryship, Erode Arts College, Erode 9. TamilNadu. 106

2 Introduction: The poultry industry in India has emerged as the most dynamic and rapidly expanding segment of livestock economy as evident from the production level touching about 40 billion eggs and 1 billion broilers with a compound annual growth rate of 8 % and 15% respectively. What was once started as a novelty in the 1970 s - egg and broiler production - has now turned out to be a highly organized agribusiness. But in spite of all these developments and relatively competitive value of the Indian poultry products (especially egg), the relative position of India in the world trade of poultry products is not so encouraging. Indian poultry industry has been growing at annual varying rates of 8-15% and this growth in the past few decades made India 4 th largest producer of eggs and 5 th largest producer of poultry broiler. At present, the industry is estimated at over Rs 30,000 crore and is expected to grow over Rs 60,000 crores by India produces 1,400 million chickens a year, which is close to 27 million a week, of which 95% is trade alive. According to a market report the poultry production and consumption in the domestic markets is slated to grow by 66% to approximately 2.3 million tonnes by Poultry sector is one of the fastest growing industries of the Indian economy than any other sector contributing about $230 million to the Gross National Product. But in statistical terms the industry has reported a loss of over Rs 4,000 crore as an aftermath effect of the bird flu crisis. The contribution of the small rural farmers points out the importance of integration of the poultry farming and the allied sector. Suguna Poultry Farm is the pioneer in poultry integration and contract poultry farming in India, with presence in 9 states and membership of about 15,000 contract farmers. Suguna has set an example of integration and contract farming before the industry and has proved to be beneficial for the company. Integration could be the way forward for the entire industry towards expansion and success. Presently 100% Foreign Direct Investment (FDI) is permitted in the food processing sector. Also FDI in food retailing, covering dairy, poultry, marine, vegetables and fruits might help the entire food processing industry grow. Poultry farming in India has transformed from a mere tool of supplementary income and nutritious food for the family to the major commercial activity generating the required revenue. The growth of the industry with steady production of 1,800 million kg of poultry meat, 40 billion eggs per year and employment generation of about 3 million people indicates the future prospects for the industry. Changing food habits, rising 107

3 income of the middle class Indian, presence of private players, rising market demand of the Indian poultry produce in the export market are some of the contributing factors to the growth of the industry. OBJECTIVES OF THE STUDY: 1. To find out the reason for taking up Poultry Business. 2. To identify the adequacy of income of the various poultry farm owners. 3. To analyse the factors that influence the farmers launching poultry farms. 4. To suggest better ways and means for effective marketing of poultry business in the globally competitive environment. METHODOLOGY: The validity of any research depends on the systematic method of collecting the data and analyzing the same in a logical and sequential order. In the present study, extensive uses of both primary and secondary data were made. Sampling Design: For collecting primary data, field survey technique was employed in the study area. Firsthand information pertaining to the behavior and the economic profile various poultry farm owners were collected from five hundred respondents. Tamilnadu state consists of thirty three districts and among these districts, Namakkal was particularly chosen for collecting the data. The respondents were chosen from the stratified geographical area representing a sum of five hundred respondents (poultry farm owners) from various revenue blocks of Namakkal District. The selection of respondents was made in active consultation with the poultry farm owners and the research supervisor, so as to represent all categories such as small and medium size poultry farm, highly educated and moderately literate. The respondents were selected randomly from the list of poultry farm owners maintained by the NECC in Namakkal regions of Tamilnadu. 108

4 Data Collection: Primary Data In order to fulfill the objectives set, a sample study was undertaken by using a well framed questionnaire that was duly filled in by the respondents. The respondents with varying backgrounds were selected based on the important aspects of their occupation, education, age, area and so forth, hailing from both rural and sub-urban areas of Namakkal District, Tamil Nadu State. A noteworthy feature was that all the five hundred respondents were filled the questionnaire with much zeal. This was due to the significant level of literacy among the respondents and the researcher s rapport established with them. The specimen of the questionnaire issued to the selected sample respondents is shown in the Appendix section of this thesis. Secondary Data The primary data were supplemented by a spate of secondary sources of data. Secondary data pertaining to the study was gathered from the records published by various poultry manufacturers. Latest information was gathered from well equipped libraries in Bangalore, Mysore, Chennai and Coimbatore and from Internet web resources. Further, the secondary data were also collected from various leading journals inclusive and exclusive of poultry. A number of standard texts were studied to obtain pertinent literature on poultry marketing. Tools of Data Collection By virtue of a mass of data obtained from research survey, as well as data from secondary sources collected and presented in the present report, descriptive and analytical research was considered the most appropriate for the study. The research problems and the questionnaire were all framed accordingly. The suggestions offered in the final chapter of the study are the sample respondents information who are selling poultry products is arranged in the open-end questions and closed-end questions in the questionnaire to collect the necessary primary data. 109

5 Analysis The study Economic Condition and Financial Decisions of Poultry Farm Owners focuses on educational status, reason for taking up poultry farm business, mode of savings, mode of expenses, financial benefits etc., Table. 1 Age Class of Poultry Farm Owners S. No Age No. of Respondents % 1. Young (below 35 years) Middle (36-45 years) Old (Above 45 years) For the purpose of this study, age of the respondents involved in poultry business was classified into three categories, viz., young age (below 35 years), middle age (36-45 years) and old age (above 45 years). The sample consisted of 164 (32.8%) respondents belonging to young category, 157 (31.4%) respondents were middle category and 179 (35.8%) respondents were from the old age category. Table. 2 Sex of Poultry Farm Owners S. No Sex No. of Respondents % 1. Male Female The sample consist 390 (78%) respondents belonging to the male category and 110 (22%) respondents belonging to the female category. 110

6 Table. 3 Marital Status of Poultry Farm Owners S. No Marital Status No. of Respondents % 1. Married Unmarried For the purpose of this study, the marital status of respondents was studied under two categories viz., married and unmarried. The sample consisted of 428 (85.6) married respondents and 72 (14.4) unmarried respondents. Table 4 Other Occupations of Poultry Farm Owners S. No Other Occupation No.of Respondents % 1. Businessmen Agriculturist Government employee Private sector employee Professionals The sample consist 165 (33%) businessmen, and 102 (20.4%) respondents who were employed in agriculturist, 47 (9.4%) respondents were Government employee, 97 (19.4%) respondents were private sector employee and 89 (17.8%) respondents were professional. 111

7 Table. 5 Experience of Poultry Farm Owners S. No Experience No. of Respondents % 1. Less than 5 years years Above 10 years For the purpose of this study, the experience gained by the respondents in their own chosen field was studied under three categories viz., lesser experienced (below 5 years), medium experienced (5 to 10 years) and highly experienced (above 10 years). The sample consisted 120 (24%) respondents have had less than 5 years experience, 106 (21.2%) respondents with medium level of experience and 274 (54.8%) respondents with above 10 years experience. Table. 6 Income of the Poultry Farm Owners S. No Income No. of Respondents % 1. Below Rs.3,00, Rs.3,00,001-6,00, Above Rs.6,00, For the purpose of this study, the income level of the respondents was classified into three categories viz., Rs.3,00,000 per annum, Rs.3,00,001-6,00,000 per annum and above Rs.6,00,000. The sample consisted 258 (51.6%) respondents earning below Rs.3,00,000 per annum, 151 (30.2%) respondents earning Rs.3,00,000 to Rs.6,00,000 and 91 (18.2%) respondents earning above Rs.6,00,000 per annum. Table. 7 Size of the Family 112

8 Size of the Family No. of Respondents % S. No 1. Small Medium Large For this purpose of the study, the size of the family was classified into three categories viz., small family, (less than 3 members), medium family (3-5 members) and large family (above 5 members). The sample consisted 194 (38.8) respondents belonging to small size family, 224 (44.8%) respondents belonging to medium size family and the remaining 82 (16.4%) respondents having a large size family. Table 8 Purpose of Doing Poultry Business Purpose No. of % S. No Respondents 1. Availability of Raw Material Demand for the product in the market Available human resources Other The respondents were asked to express the purpose for which the purpose of marketing of the poultry products. the sample consisted 114 (22.8%) respondents availability of raw material purposes, 288 (57.6%) of the respondents demand for the product in the market purposes and

9 (10.2%) of the respondents poultry business for available human resources and 47 (9.4%) of the respondents poultry business for other purposes. Table 9 Reason for Selecting a Poultry Business Reasons No. of Respondents % S. No 1. Self- employment Family Business Govt. Encouragement Easy to start Others The sample consisted 121 (24.2%) respondents selecting a particular self- employment, 169 (33.8%) respondents preferred the poultry business because of its family business; 59 (11.8%) respondents selected the present government encouragement; 98 (19.6%) of the respondents selected a particular easy to start of poultry business and 53 (10.6%) of the respondents selected a particular other reasons such as compulsion, necessity and to enjoy the fringe benefits offered in the business sector/government sector in poultry business. Table 10 Reason for Preferring the Poultry Business S. No Reason for Preferring No. of Percentage the poultry business Respondents 1. Smallness in size Family Business Self employment

10 4 Low investment It is learned from the above table that 37% of the respondents preferred poultry business because their present business smallness in size suggesting that small is successful business. It is followed by 35.8% of the respondents who preferred this family business. 14.6% of the respondents for the purpose of self employment. On the other hand, 12.6% of the respondents selected this business because of its affordable cost. From the analysis, it can be concluded that 37% of the respondents preferred poultry business due to its smallness in size. Table 11 Factors Considered for Locating Poultry Farm in Namakkal S. No Factors No. of Percentage Respondents 1. Available raw material Nearby Veterinary Institute Climate conditions Available market facilities Transport facilities From the above table it is clear that 20.4% of the respondents were impressed by availability of raw material; 12.2% of the respondents were attracted by the nearby veterinary institute: 28.2% of the respondents were influenced by the climate conditions: 16.2% respondents were attracted by available market facilities: 23.0% of the respondents said that the prevailing transport facilities are highly preferable. Table 12 Source of Finance For Poultry Business 115

11 S. No Source No. of Respondents Percentage 1. Own Bank loan Private bank Non-banking financial institutions It is found from the above table that 28.4% of respondents invested their own amount, 35.6% of respondents directly obtain of the loan from the Bank, 17.8% of respondents availed for the financial assistance in private bank: On the other hand, 18.2% of respondents that they had obtained finance from non-banking financial institution. From the analysis, it is concluded that most of the respondents preferred loan from the banks arranged by the farmers. Table 13 The Common Problems faced by the Farm Owners S. No Problems No. of Respondents Rank 1. Financial Problem I 2. Raw Material Problem II 3. Marketing Problem IV 4. Labour Problem III 5. Power Problem V 6. Managerial Problem VI It could be observed from Table 13 that the financial problem was ranked in the first place with a Garrett score of points. It is followed by raw material problem with a Garrett score of points. The problem of labour is placed in the third rank with a Garrett score of points. Marketing problem and power crisis were ranked in the fourth and fifth position with the 116

12 Garrett scores of and points respectively. Lastly, the problem of managerial was placed in the sixth with a Garrett score of points. SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION: At one level, the study is aimed at measuring the level of satisfaction perceived by the poultry farm owners and at another level, aims at measuring the intensity of the major benefits enjoyed and problems faced by the poultry farm owners in the marketing of poultry products on the basis of issues faced. For this purpose, 500 sample respondents were selected at randomly from Namakkal District, Tamil Nadu state. Field survey technique was employed to collect the first hand information from the sample respondents. Questionnaire was the main tool employed to collect the pertinent data. The data thus collected were arranged in simple tabular forms and appropriate statistical tools were used for data analysis. Based on these analyses, interpretations were made systematically and attempt is made to recapitulate the key findings and conclusion. 1. Age wise analysis of the poultry farm owners satisfaction was studied and found that old age respondents have perceived the maximum level of satisfaction than the young and middle aged category. 2. The sex-wise analysis of the satisfaction level of the respondents highlights that male respondents have perceived the maximum level of satisfaction in poultry business than the female respondents 3. It was found from the analysis that married respondents have perceived the maximum level of satisfaction than the unmarried category. 4. Other occupations owned by the respondents were studied and the analysis showed that businessmen have perceived the maximum level of satisfaction in poultry business than the agriculturists and private sector employees category. 5. Respondents experience was studied and was found that the respondents who have above 10 years experience have perceived the maximum level of satisfaction than the respondents with an experience of below 5 years and 5-10 years. The chi-square test proved that there is a close relationship between experience of the respondents and their level of satisfaction in poultry business. 117

13 6. Income-wise analysis highlighted that the respondents who earns below Rs.3,00,000 per annum have perceived maximum level of satisfaction in poultry business than the respondents earning Rs.3,00,001-6,00,000 and above Rs.6 lakhs. The chi-square results revealed that there is no association between the respondent s annual income and their level of satisfaction. 7. It was found that family size plays a crucial role in the poultry business. The study revealed that respondents belonging to medium size family have perceived the maximum level of satisfaction than those the small size family and large size family. 8. It is witnessed from the analysis that majority of the respondents got the financial assistance through bank loans and own financial. 9. Respondents were asked to highlight the factors that influenced them to select the poultry business. From the analysis, it is noted that the factors such as availability of raw material, climate conditions and transport facilities and available market facilities attracted them to select the poultry business. 10. While analyzing the reasons for selecting poultry farm business it is learned that majority of the respondents selecting poultry farm business due to its smallness in size. 11. Problems faced by the respondents in poultry business was studied and found that lack of sufficient infrastructural facilities was ranked first. It is followed by lack of proper training and knowledge for the poultry farm owner to maintain the farm with neat and hygiene as well as breeds the chicks properly. 12. Purpose of running poultry business was studied and it was learned that the respondents owning the poultry business due to heavy demand for the poultry product in the market and easy availability of human resources. The chi-square test too proved that there is a close relationship between purpose of starting poultry business and the level of satisfaction perceived by the poultry farm owners. 13. Poultry farm owners expectation was also studied and it was found that the farmers are expecting the financial support from the government and loans subsidies. 14. The reason for selecting a particular poultry business was studied and it was found that it is a family business. 118

14 15. The common problem faced by the poultry farm owners in the poultry business was studied with the help of Henry Garrett ranking method. The farmers pinpointed that the financial problem was a major crisis for them. It is followed by the other problems in poultry business. SUGGESTIONS: 1. In this poultry business, intermediaries play a major role in selling the poultry products like eggs and poultry meat, etc., to the retailers. Due to this market price difference occurs between the producers and consumers. In order to redress the price discriminations, the government may start cooperative societies and offer the poultry products at an affordable price. 2. At present, different strains producing different size of eggs which cause fluctuations in price of eggs. Hence, it is suggest that the genetic modification may be adopted to solve the different egg prices in poultry business. 3. The volatile nature of the foreign market directly affects the price of the poultry products and the poultry farm owners are suffering ultimately due to stringent norms of hygiene condition of birds. Hence, it is suggested that the domestic consumer market may be concentrated by the poultry farm owners. 4. The poultry sector also brought under the agriculture sector, hence, adequate loans and government subsidies may be granted. 5. To avoid shortages of funds due to credit sales to the intermediaries, poultry products should be sold directly by poultry farm owners or through its associations. 6. At present the employees are suffering with poor wages and working more than 12 hours per day. Hence, it is suggest that the NECC and association should involve directly to regularize the wages and working hours of labours. 7. The most of the poultry farm owners arranging their financial needs through the banks. Hence, it is suggested that the poultry farm owners should creating an efficient marketing channel that will help them to provide remunerative prices to poultry farm owners and avoid financial crisis. 8. The large poultry farm owners are playing a major role in selling of their poultry products. Whereas, the small and medium poultry farm owners are mainly depending 119

15 upon the large poultry farms for fixing the price of their products. Due to this they are facing hardship to overcome this situations, the government may orgainse overall market structure to sale of their poultry products. 9. As the poultry farm owners are suffering with problems of delay in loading and transportation of the poultry products, which are being distributed to various area located at different places. This issue shall be redressed through establishing a relationship with employees (load man) and transport owners and other small farmers as well as to safeguard their poultry business. 10. The poultry business are frequently affected by various diseases like Avian Influenza, H2N1, and bird flu, etc., Hence, it is suggested that the poultry farm owners should follow the preventive measures of vaccination and basic medication procedure. 11. The major problem faced by the poultry farm owners is power cut during summer season and irregular power supply, which very much affect the poultry production. Hence, it is suggested that the poultry farm owners may avoid the power problems through an alternative energy sources like bio-gas with the help of government. 12. It is learned from the analysis that the poultry farm owners facing lack of guideline in entrepreneurship development and R & D facilities. Hence, their views may be collected and accordingly a remedial measure should be initiated. 13. The poultry farm owners facing the problems like non-availability of marketing intelligence survey. Hence, it is suggested that the poultry farm owners should know thoroughly about domestic and international market demand and consumers preference through marketing intelligence information system. 14. The majority of the poultry farmers prefer the poultry business as their family business but they were not having adequate experience. Hence, it is suggested that they may be given adequate information, education, communication and orientation training programmes. 15. Most of the poultry farm owners feel that the poor consultancy services provided by private agencies and expensive one. Hence, it is suggested that the standard consultancy organizations may initiate the services on par with world class manufacturing/services. 120

16 16. The age-wise analysis and level of satisfaction of poultry farm owners showed that the old age poultry farm owners have perceived the maximum level of satisfaction than the young and middle age category. Hence, it is suggested that poultry entrepreneurs awareness programme may be conducted exclusively young generation and graduates. 17. Sex-wise analysis indicates that male poultry farm owners have perceived more satisfaction than the female respondents. Hence, it is suggested that the female poultry farm owners should get expertise advice, and motivated by the family members and government/banks to fulfill their expectation. 18. Study on the poultry farm owners experience in their poultry business revealed that it is suggested that the poultry farm owners may be organize entrepreneurs meet, and share their views to analyse the present market conditions, and their weakness to find remedial measures. CONCLUSION: The world poultry industry has grown consistently since 1940s. The growth in poultry industry has been based on strong consumer demand for products that are perceived as affordable, safe and healthy. Consumers in certain region of the world are willing to pay a higher retail price for more tasty chicken meat produced in less confined conditions. Similarly, the Indian Poultry Industry has got significant growth potential, given its existing low penetration levels, fast growing economy and favorable demographics with significant selling growth, the burgeoning mid and high income group and the increasing urbanization. The domestic economic scenario is robust in the wake of the cyclical upturn in industrial activity, which is currently being witnessed and now this auger well for a demand for poultry products in India. Further, the poultry geneticists and breeders have brought about tremendous improvement in economically important traits of egg and meat type chicken and also in other avian species. Looking at the present scenario and advances, made in the field of poultry breeding for economic purposes, the future geneticists and breeders would have to search out alternate breeding strategies. The production and marketing of poultry products in India expected to double the progress in the next four years. This research is a rewarding exercise to the scholar and the researcher would feel delighted, if the suggestions and recommendations made here on the basis of the study undertaken are considered and implemented by the poultry farm owners and the government. It 121

17 would also be gratifying if this research initiates further research on poultry business and necessary R&D in this field, a need of the hour. References: Amiti Sen, TNN, India to push for easier norms for exports to EU, Economic Times, 8 Jan, 2008 Vishwanath Kulkarni, Poultry exporters expanding processing capacities to enter new markets, Economic Times, 2007 Aravind Kumar, Exporters move courts to clear maize consignments lying at ports, Exim News Service - New Delhi, July 16, 2008 F. Mirzaei, S. Yazdani, A. Gharahdaghi and S.M. Mostafavi, Department of Animal Production and Management, Animal Sciences Research Institute,P.O.Box: ,Karaj,Iran, The role of poultry meat export in the dynamics of the developing countries: Iran's status in the Middle East region, Bank of India, Suguna Poultry to assist farmers increase production, ThePoultrySite News Desk, 2008 S. Shah, M. Sharmin and S. Haider, Problems of small to medium size poultry farms - Bangladesh perspective, The World Bank Group, (2003), Poverty In Bangladesh: Building On Progress, World Bank in Bangladesh, South Asia Region, Bangladesh. Bangladesh Bureau Of Statistics,(2001) Statistical Yearbooks., Statistics Division, Ministry of Planning, Government of the People s Republic of Bangladesh, Dhaka, Bangladesh. Ahmed and Hamid M A (1991) Status of poultry of production and development strategies in Bangladesh. Proceedings of the Workshop on Livestock Development in Bangladesh, Bangladesh Livestock Research Institute, Savar, Dhaka, Bangladesh, July 16-18, Huque, Q.M.E. and Stem, C. (1993) Current status of poultry production and marketing systems in Bangladesh. Bangladesh Agricultural Research Council/ USAID/Checchi & Company Consulting, Inc. M.Rahman (2003) Growth of poultry Industry in Bangladesh, Poverty alleviation and employment opportunity, 3rd International Poultry Show and Seminar, pp 1-7, Bangladesh Branch: World Poultry Science Association. 122

18 International Trade, Rai University, pp Tage Lysgaard, EEC Commission's Advisory Committee on Eggs, Secretary General of The Danish Poultry Council Secretary General of A.V.E.C, Current problems of poultry production in the EEC, pp Bishnupada Sethi, Backyard Poultry in Orissa, Orissa Review * January 2007, pp Vinod Kapur, Pioneering Micro-Entrepreneurship through Poultry Breeding and Distribution in Rural India - Innovations Case Narrative: Keggfarms, 2008, pp Tapati Dasgupta, Atanu K. Roy and R. N. Chattopadhyay, Gender Entrepreneurship in a Rural Scenario: A Case Study of South West Midnapore, West Bengal, J. Soc. Sci., 12(2): (2006). Ahmed, L.S. (1990): Smallholder Rural Poultry Production in the Somali Democratic Republic. Proceedings CTA International Seminar on Smallholder Rural Poultry Production, Thessaloniki, Greece, Oct Vol. 2, pp Aini, I. (1990): Indigenous chicken production in South-east Asia. World s Poultry Science Journal, Vol. 46, March 1990:

19 AUTHORS PROFILE: Dr. R. MOHANRAJ is Associate Professor & Research Scholar in the Department of Management Studies, Annai Mathammal Sheela Engineering College, Namakkal, Tamilnadu. He has received MBA from Bharathiar University, M.Phil from Periyar University. He presented more than 35 papers in both National level and 5 papers International level seminars. He is guiding MBA students of Periyar University, Annamalai University, Alagappa University and IGNOU. Dr. L. MANIVANNAN is currently working as Reader in the Department of Corporate Secretaryship, Erode Arts College, Erode 9. TamilNadu. He has received M.B.A from Madras University and PhD from Bharathiyar University. He has guided 160 M.Phil and 26 PhD students in Bharathiyar University and Other Universities in TamilNadu. He has more than 20 years experience in teaching for Management students. 124